Amazon CEO Jeff Bezos is suddenly making nice with Trump -- there's a big reason why

Amazon CEO Jeff Bezos is taking a much more conciliatory tone towards President-elect Donald Trump, after publicly criticising him on several occasions prior to the election.

Why the olive branch?

It could be as simple as Bezos taking the high road, despite his differences with Trump.

But there’s a much more pragmatic reason for Bezos to make nice with the 45th President of the United States: Amazon has grown so big, it needs Washington on its side to keep up its crazy growth.

Amazon is no longer just an online shopping site. Over the past 20 years, the company has evolved from a small online book seller to the 5th most valuable company in the US. It now sells everything from detergent to cloud computing power, while expanding into new areas like voice-controlled technology and delivery drones.

Add that to Amazon’s increasingly dominant position in online retail, and you have a company whose business interests are tightly linked to government policies, across areas like sales tax, cybersecurity, net neutrality, and shipping, just to name a few.

“If your company is as big as Amazon, it would be foolish to make enemies with the new administration right off the bat,” Lee Drutman, a senior fellow at New America Foundation and the author of “The Business of America Is Lobbying,” told Business Insider.

“Given what’s at stake for Amazon, why would Bezos take that fight?”

More lobbying

Amazon has moved to strengthen its ties with the nation’s capital in recent years.

The clearest sign can be found in its lobbying expenditures. In 2015, Amazon dramatically increased its spending on lobbying to $9.07 million, a whopping 91% jump from the year before. That may be peanuts for a company now generating over $100 billion a year in revenue, but it’s still large enough to make it the 5th highest among all tech companies, and more than the bigger ones like Apple and Microsoft.

Amazon is spending even more this year. It’s already spent $8.3 million on lobbying in the first three quarters of the year, almost the same amount it spent all of last year, public records show. According to, a non-profit political research group, Amazon only trails AT&T, Alphabet, and Comcast among tech companies, and has made it to the top 20 for the first time among companies from all sectors.

On top of that, Bezos not only purchased The Washington Post, he hired former White House press secretary Jay Carney last year and recently moved Amazon’s DC office to a much larger space.

“You hire lobbyists as your ear on the ground in Washington,” Tim LaPira, associate professor of political science at James Madison University, told Business Insider.

“If a CEO and a major public official, the President of the United States, don’t have a good relationship, then it’s going to be that much harder for that company to be heard and their concerns to be taken seriously.”

What would Trump do?

Most of Trump’s vitriol against Bezos have stemmed from tax and antitrust issues, but it’s unclear where exactly he stands on a lot of policy matters.

New America Foundation’s Drutman said it’s possible Trump could use his power over the Justice Department and IRS to push for antitrust scrutiny and increased tax audits on Amazon. Also, given Trump’s stance on US trade and immigration reform, Amazon’s overall business could take a direct hit.

To be sure, the president doesn’t have the magic wand to make these changes or put pressure on specific companies at will. But the president does have huge influence on what the government decides to do, Professor LaPira said.

“The president essentially plans the administration’s policy agenda, and has a great deal of leverage in the legislative process,” he said. “He could really influence the legislature’s to-do-list.”

Public filings show Amazon’s lobbying efforts have focused on a wide array of issues, including, sales tax, net neutrality, transportation safety, patent law, data protection, and mobile payments.

In its latest quarterly filing, Amazon warns that changes in government policies could harm its business. It writes:

“We are subject to general business regulations and laws, as well as regulations and laws specifically governing the Internet, e-commerce, electronic devices, and other services. Existing and future laws and regulations may impede our growth.”

It’s probably too early to predict what Trump’s presidency will mean for Amazon. But investors sure don’t seem very reassured: Amazon’s stock is now down more than 6% since Trump’s win on Tuesday, while the Dow Jones Industrial Average hit an all-time high.

Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.

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